International travel bans

Due to various quarantine procedures and travel protocols of countries around the world, some tenants have had to return home and break their lease, while others who were expecting to start a new lease will not be able to.

International students have been significantly affected by the pandemic.

Below are a few common situations that students/tenants may encounter.

The first thing you need to work out is whether you have actually made an agreement. Simply signing a tenancy agreement and returning the signed agreement to the landlord or estate agent on its own is not necessarily considering entering into a binding agreement.

In such situations, you may choose to write to the landlord/estate agent to advise them that you will not be proceeding with the tenancy, and then do nothing more.

The landlord is more likely to regard the signed agreement as binding if you have also paid a bond and rent. In such situations you should consider which of the five options described below to follow to end your tenancy.

These five options come under the Residential Tenancies Act (Vic) 1997

1. Notice of Intention to Vacate
   From 12 May 2020 the law changed to allow people experiencing severe hardship to give 14 days’ notice of their intention to end their lease, regardless of whether their lease was periodic (e,g, month to month) or for a fixed term, and without any costs for ending the lease early. For more information see moving out.
2. Reduction of Fixed Term Tenancy
   If you are not sure if your situation allows you to give 14 days’ notice, you can apply to VCAT to ask for your tenancy agreement to be reduced.  Before making a decision, VCAT will need to be satisfied that you would suffer severe hardship if the agreement isn’t reduced. VCAT will take into account both that hardship and the hardship the landlord may suffer if the agreement is reduced.  If VCAT reduces your fixed-term agreement, you are not liable for any costs of breaking the lease. For more information see moving out.
3. Terminate the lease by mutual agreement
   A lease can be terminated by consent or agreement. If you and the landlord cannot reach an agreement, you may consider offering to pay a lump sum as compensation to resolve the issues. If the landlord is holding any bond or rent money, they don’t have an automatic right to keep this money, so you can challenge this by going to VCAT.
   
4. Assignment (transferring your lease to someone else with consent of landlord or Order from VCAT)
   Do you know anyone in Australia who could take over your lease? With the written consent of the landlord, you can transfer your lease to someone else. If the landlord refuses, you can apply to VCAT (section 82, Residential Tenancies Act (Vic) 1997) for permission to do this. If the landlord alleges you have broken the lease and have cost them money, you can argue that the landlord failed to mitigate their loss by refusing to transfer the lease.
5. Break your lease
   The final option is to write a letter to the landlord/agent explaining that you no longer wish to proceed with the lease and that you do not intend to collect the keys. It is important to remind the landlord/agent that they should relet the premises as soon as possible. This is the least desirable option as the landlord may make a claim for compensation over you breaking your lease.If you have had to end your lease for COVID reasons, then the above options should be available to you, particularly options 1 and 2.However, if none of the above options suits your circumstances, see breaking a lease for more options/information.

You may be able to end your lease under one of the five options above. However, if none of these suits your circumstances see breaking a lease for more options/information.

Entering into a lease agreement can be done in a number of ways. It can be done orally (which can be harder for the landlord to prove), by click wrap (accepting terms and conditions on a website or app), by email exchange back and forth, or by signing documentation.

The general principle is that an agreement has been made if there is clear evidence of an offer being made and clear evidence of acceptance of the offer. An offer must include all essential terms and not have further conditions added to it by the other party. Otherwise, this is not a “true meeting of the minds” and parties may still be considered to be in negotiations. Any money payment made in good faith during the negotiations to secure the premises is considered a holding or application deposit, and subject to section 50, Residential Tenancies Act (Vic) 1997.

It is common for people to respond to advertisements of rooms/properties for rent. In many cases agents will indicate that your application “has been accepted” but this does not mean a lease has necessarily been entered into.

Sometimes, it is unclear whether you have entered into a lease. Generally, a tenant will allege that any money they have paid to a landlord was just a holding deposit, while the landlord will allege that the tenant has broken their lease. This will be a matter for VCAT to determine.

To get back a holding deposit

To apply for money (other than bond money) to be returned to you, simply apply to VCAT under section 210, Residential Tenancies Act (Vic) 1997.

The person applying to VCAT has to prove whether or not a contract was entered into. In other words, if you apply to VCAT seeking the return of your holding deposit, you will need to prove that no agreement was reached between you and your potential landlord. If the landlord is trying to make you pay more money by alleging that you broke a lease, they will need to prove that a contract was entered into.

Firstly, it is important to determine if you, and the lease you signed. are covered by the Residential Tenancies Act (Vic) 1997. Many housing providers claim they are not bound by the Act, but they usually are.

The main exemption that relates to student housing is section 21, Residential Tenancies Act (Vic) 1997: Educational institutions. Generally, to be exempt, the student accommodation must be part of a specific learning institution or be formally affiliated with a particular institution, and the accommodation is used primarily to house students of that particular institution. Formal affiliations require a written agreement between the accommodation provider and the institution.

Even if the provider is exempt from the Residential Tenancies Act, the Australian Consumer Law and Fair Trading Act 2012 still applies, which may have some benefits for you.

Breaking a lease in student accommodation can be more financially risky than breaking an ordinary lease. There are three main reasons:

• student housing generally can only be let to enrolled students;
• once semester has started, fewer students are looking to move in so it is more difficult to find a new tenant; and
• some student accommodation places already have lots of vacant rooms.

The law is unclear whether the landlord needs to prioritise letting out your vacant room or whether they are legally entitled to rent out other vacant rooms first, thus leaving you potentially liable to pay more money.

The process to break a lease is the same as breaking a lease in any other situation. You may be able to end your lease using one of the five options (above) But if none of these suits your circumstances see breaking a lease for more options/information.

If you are unsure as to your best option either seek legal advice or consider making the application for a reduction.

When people have signed a lease together, they are called co-tenants. Co-tenants are jointly and severally liable for paying the whole rent. A co-tenant is still liable for the rent if they leave unless they get their name taken off the lease. Changing the names of tenants on a lease is called assignment. See section 81-84, Residential Tenancies Act (Vic) 1997.

For more information see Shared Households and Assignment.

Note: Tenants Victoria does not advise in relation to co-tenant disputes.

If one co-tenant needs to leave due to family, health or financial reasons, for example, it may be in the interests of all the tenants to determine whether the household should end the lease, or try to assign the leaving co-tenant’s interest.

Assignment can be done in two ways; reducing the number of people on the lease (which increases the rent payable by each remaining co-tenant) or finding another tenant.

Assignment may be beneficial in some circumstances where the household can easily find another tenant to take the place of the exiting tenant. However, the effect of releasing the tenant means the remaining tenants could carry the liability for any unpaid rent. So it is important to consider whether the household wants to release a tenant and then look for a new tenant, or require the existing tenant to find a suitable housemate to replace them as a condition of the assignment.

(see Avoiding Eviction for Rent Arrears).

If you believe you have been treated unfairly because of your nationality or a disability you have, you can raise a complaint with the Victoria Human Rights and Equal Opportunity Commission.

This free service can facilitate conciliation and assist parties to reach an agreement. If the conciliation is unsuccessful, or the parties wish to, they can apply to VCAT under the Equal Opportunity list

If you paid a bond, the landlord must lodge the money with the Residential Tenancies Bond Authority (RTBA). Even if the tenancy did not commence (section 406, Residential Tenancies Act (Vic) 1997), the landlord must lodge the bond unless they immediately refunded the money to you.

It is unlawful for a landlord to take a bond in lieu of any debt without lodging it, regardless of whether you have broken your lease or the landlord alleges that you owe them money. If your landlord is refusing to lodge a bond, contact Consumer Affairs Victoria immediately on 1300 55 81 81 or through the National Translating & Interpreting Service on 131 450.

If you don’t know whether your bond has been lodged, you can call the RTBA on 1300 137 164 and provide your name and the proposed rental address.